If I am reading the rules correctly, routing damage completely ignores a unit's hit points? In other words, if a unit with 4 hit points is forced to take one point of routing damage, then that unit is effectively routed and out of the battle?
Its an interesting concept and works well to prevent armies composed of all high tier units while simultaneously preventing the loser from having all of his troops destroyed in a given battle. However, I could see how this would be frustrating as well: "Oh look, your initiative 2, 1 hp character just routed my initiative 5, 4 hp character." The damage at early intitiatives is compensated by the hit points, but it seems the only affective way of guarding against a rout is numbers.
Then again, that depends on how frequent a rout will be, etc. Also, since combat is limited to a single 'round' per initiative, its not quite as big a deal as if combat were to keep going. All in all, I am excited about the mechanics as they stand as it seems like it will interesting impacts on how the game flow goes (i.e. a defeated army that rallies in the spring to take back a keep or a retreating army that falls back into terrain away from the attacker's primary objective, forcing the attacker to choose pursuit and delay their objective or push on and risk a rallied force at their backs).
So, what do folks think of Rout damage vs Damage damage?